NMPF President and CEO Jim Mulhern speaks at the organization’s annual meeting in Las Vegas, NV on Nov. 16.
Tag: dairy exports
NMPF’s Morris Says Ports Crisis Requires Federal Action
Current supply chain strains at U.S. ports will need improvements in federal policies to provide both short- and longer-term solutions, NMPF Senior Vice President for Trade Shawna Morris said in an interview with the National Association of Farm Broadcasters. “The fact that the market is not improving, that things are not sorting themselves out and that we don’t seem to be around the corner,” Morris said, “really points to the need for more government introduction into this process through the legislative side and through the administration side to help deal with this.”
NMPF’s Castaneda Discusses Ports Backup
NMPF and U.S. Dairy Export Council Executive Vice President Jaime Castaneda discusses backups at U.S. ports, how delays in dairy shipments can threaten trade reliability and relationships, and how federal policy can be improved to alleviate dairy export challenges on the Adams on Agriculture podcast.
Dairy Groups Applaud Major Climate-Smart Agricultural Initiatives Touted at COP26
The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) applauded the U.S. Department of Agriculture’s announcement this week that it has joined the Pathways to Dairy Net Zero initiative as a formal supporter. The dairy groups also welcomed this week’s formal launch of the Agriculture Innovation Mission (AIM) for Climate.
These global agriculture efforts align with the approach U.S. dairy is taking to reduce its environmental impact through its Net Zero Initiative, which aims to achieve net-zero greenhouse gas emissions by 2050 and will help the U.S. dairy industry be an environmental solution now and in the future.
Pathways to Dairy Net Zero is a ground-breaking, multi-stakeholder initiative that aims to accelerate climate change action across the dairy sector. It is well-aligned with the U.S. dairy industry’s own Net Zero Initiative, launched last year, that reinforces its leadership within global agriculture as a source of climate solutions. AIM for Climate accelerates climate-smart agriculture and food systems innovation over the next five years by embracing practical solutions identified through investments in research and pilot programs. This is very similar to dairy’s Net Zero approach.
To help demonstrate the U.S. dairy industry’s commitment to sustainability and ensure our farmers, processors and exporters are well represented in this important global forum, USDEC’s senior vice president for Sustainability and Multilateral Affairs, Nick Gardner, was on the ground in Glasgow for COP26 events.
“Dairy farmers are proud to be part of the U.S. Dairy Net Zero Initiative to do our part in driving toward a global climate solution,” said Jim Mulhern, president, and CEO of NMPF. “USDA’s formal support for the Pathways to Dairy Net Zero, which NMPF also supports, will help to further catalyze this global effort by dairy sectors and governments around the world to foster sustainable production practices. We commend USDA’s global leadership in charting an incentive-based approach to encouraging sustainably managed livestock systems that can help feed a growing global population while minimizing environmental impacts.”
“With the world’s lowest greenhouse gas footprint per gallon of milk, U.S. dairy leads the world in sustainability. Yet we’re also deeply committed to making further progress as we work together with others in the U.S. and around the world to create environmental solutions that make U.S. dairy ever more competitive globally,” said Krysta Harden, president and CEO of USDEC. “Working together and with a firm commitment to the positive role that innovation and productivity can play in the sustainability arena, we’ll be able to help create the sustainable future so important to us all.”
NMPF Urges USTR to Expand Dairy Market Access Opportunities
NMPF joined with the U.S. Dairy Export Council on Oct. 27 in filing with the U.S. Trade Representative’s Office a highly detailed set of comments outlining barriers to U.S. dairy exports. The submission was made to inform USTR’s National Trade Estimate Report on Foreign Trade Barriers, an annual compilation of constraints around the world to U.S. exports.
NMPF emphasized the importance of expanding market access opportunities to better support the U.S. dairy sector, urging the pursuit of new agreements and tariff reductions with key trading partners. The comments also highlighted nontariff trade barriers, particularly those driven by protectionism or overly burdensome policy prescriptions, that make it harder than necessary for U.S. dairy companies to compete in foreign markets. For instance, extensive sections highlight ongoing issues with key trading partners like Mexico (product standards revisions, conformity assessments, geographical indications) and the EU (the bloc’s intervention scheme, certifications, border measures, geographical indications, Farm to Fork plans). Newer barrier areas were also covered, such as Colombia’s milk powder safeguards investigation, Indonesia’s excessively slow dairy facility registration process, and Egypt’s WTO-illegal single-source halal certifier mandate, among other issues.
In total, the comments outline trade issues with 30 countries or regions, as well as concerns related to Codex, the World Health Organization and the World Trade Organization.
NMPF Continues Push on Supply Chain Constraints
While national headlines are dominated with news of delayed imports threatening to put a damper on the upcoming holidays as a result of supply chain disruptions, U.S. dairy exporters are facing an increasing, and in some ways opposite, difficulty: Securing containers and cargo ship space for their products.
That issue is gaining broader attention as well, thanks in large part to the efforts of the U.S. Dairy Export Council (USDEC) and NMPF, which along with other ag organizations and companies are leading the policy push for supply chain improvements.
That work commanded a larger spotlight recently as Congress convened to examine the supply chain impacts on American agriculture and related sectors. The current supply chain crisis could cause “irreparable harm” to agriculture, Mike Durkin, President and CEO of Leprino Foods, said at a U.S. House Agriculture Committee hearing Nov. 3 about how supply chain issues are affecting export markets for Leprino and the U.S. dairy industry. USDEC and NMPF voiced strong support for Durkin’s call for U.S. government action to more effectively tackle the shipping crisis and its effects on dairy farmers and manufacturers.
“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon. I’m here to talk about a critical component of this disruption that has not received much attention – exports,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”
Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help American agriculture producers reach their foreign markets effectively.
Even as cargos coming from Asia are at full capacity, 72% of containers leaving major California ports are leaving empty – a record volume. While supply and demand issues are a large part of the problem, foreign-owned carrier lines have taken advantage of the situation to forgo loading U.S. exports in favor of loading empties for a quick turnaround toward more lucrative Asian imports. As a result, continually rolled bookings, unprecedented shipping rates, product deterioration, and high detention and demurrage fees have cost American dairy exporters nearly $1 billion through just the first seven months of the year. As a result, even as international demand for dairy products reaches records, U.S. shippers are losing market share to competitors as the United States risks its reputation as a reliable supplier.
NMPF, USDEC and policy partners continue to drive home with the administration and Congress the long-term implications this crisis will have on dairy exporters unless measures are taken to reign in unwarranted carrier behavior. That work has helped to build bipartisan support in Congress for the Ocean Shipping Reform Act (H.R. 4996), which now has 65 cosponsors. A briefing paper on the legislation is here; a new “frequently-asked questions” document compiled by NMPF can be found here. In October, NMPF and USDEC urged the Department of Transportation to voice support for the legislation and provided detailed recommendations on several other concrete steps that DOT and its interagency partners could take to help address the shipping crisis.
The past month has seen a spate of steps announced to begin to help address the supply chain problems. The announced follow a series of meetings NMPF, USDEC were the sole dairy organizations that a long with a few other agricultural leaders held with officials in September, including with White House Ports Envoy John Porcari and other White House supply chain task force staff, to help drive home the depth and complexity of the shipping-related challenges facing dairy exporters.:
- As a partial response to NMPF sharing specific data on the impact of the issue and direct advocacy, USDA announced Sept. 29 that the agency will provide $500 million “to provide relief from agricultural market disruption, such as increased transportation challenges, availability and cost of certain materials, and other near-term obstacles related to the marketing and distribution of certain commodities.” NMPF will be sharing member feedback on how the funds could be best used to mitigate the congestion in a meeting with USDA officials next week.
- On Oct. 13, following months of intensive advocacy to the administration from NMPF, President Biden announced a series of public and private commitments from ports, dockworkers and large companies aimed at addressing port bottlenecks that have been snarling supply chains for nearly a year. The commitments included
- An expansion to 24/7 operations at the Ports of Los Angeles and Long Beach
- An International Longshore and Warehouse Union announcement that its members are willing to work the necessary extra shifts, and
- A pledge from six large companies – Walmart, UPS, FedEx, Samsung, Home Depot and Target – to use the expanded hours to move more cargo off the docks so ships can come to shore faster.
- On Oct. 20, California Governor Gavin Newsom issued an executive order that directs state agencies to identify state, federal and private land for short-term container storage; extend a temporary exemption to current gross vehicle limits to priority freight routes; and establish workforce training and education programs.
NMPF encourages the dairy farming community to reach out to elected officials to voice support for the proposed House legislation and highlight the importance of action to deal with the shipping crisis impacting dairy exports.
Dairy CEO Says Supply Chain Crisis Could Permanently Harm U.S. Agriculture
The current supply chain crisis could cause “irreparable harm” to agriculture, Mike Durkin, President and CEO of Leprino Foods, said in testimony prepared for a U.S. House Agriculture Committee hearing today about how supply chain issues are affecting export markets for Leprino and the U.S. dairy industry. The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) voiced strong support for Durkin’s call for U.S. government action to more effectively tackle the shipping crisis and its effects on dairy farmers and manufacturers.
“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon. I’m here to talk about a critical component of this disruption that has not received much attention – exports,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”
Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help American agriculture producers reach their foreign markets effectively.
Leprino Foods, the largest purchaser of milk in the United States, is a family-owned, privately held company with 4,500 employees and facilities in Colorado, California, New Mexico, Michigan, Pennsylvania and New York. It supports over 1,000 dairy farms and is the largest producer of mozzarella cheese as well as a leading supplier of dairy nutrition products. Leprino exports 26% of its milk equivalent volume to 55 countries.
Across the industry, approximately one day’s worth of U.S. milk production each week goes to exports, which results in about $6.5 billion in U.S. dairy products being exported to over 133 countries.
“The strain of shipping challenges is taking a heavy toll on dairy exporters, which is why it was so important that the House Agriculture Committee heard today from companies such as Leprino Foods that are doing everything possible to hang onto foreign customers yet are still bearing the brunt of this problem,” said Krysta Harden, president and CEO of USDEC. “Dairy exporters are working hard to get American-made product to foreign customers in a reliable and affordable way, but the present situation can’t be sustained long-term. We need Congress and the Administration to move swiftly to improve the efficiency and fairness of supply chains.”
“Dairy depends on exports, a vital part of the total demand for the milk produced every day by America’s hard-working dairy farmers” said Jim Mulhern, president and CEO of NMPF. “We risk damaging foreign market relationships and long-term customers if we cannot better assure efficient export flows. Leprino Foods provided some important recommendations to Congress to address the supply chain challenges. We hope both they and the Administration act quickly to provide relief.”
Ports Crisis Costing Dairy Farmers, NMPF’s Castaneda Says
U.S. dairy exports are being hindered by supply chain backups as U.S. ports, NMPF Executive Vice President Jaime Castaneda says in an interview on RFD-TV. “It is holding up the amount of product that we can export overseas, therefore that actually impacts the price of every single producer in the country,” Castaneda said.
NMPF Works to Preserve Market Access in Colombia
NMPF Executive Vice President for Policy Development and Strategy Jaime Castaneda testified in a hearing convened Aug. 12 by the Colombian Ministry of Trade, Industry and Tourism, calling on the Colombian government to terminate its safeguard investigation on imports of U.S. milk powder.
The Colombian government began the investigation in June to determine whether imports of U.S. milk powders were injuring its domestic industry, a move that appears to be politically driven. NMPF staff worked closely with USDEC’s regulatory team and South American office, as well as with U.S. exporters, to submit extensive data and information to Colombia to counter the Colombian livestock sector’s push to impose tariffs on U.S. milk powder exports.
Castaneda in his testimony highlighted that any imposed safeguard would create inefficiencies in the Colombian dairy processing sector and a market deficit of certain dairy products in Colombia, without helping its dairy producers. Castaneda called the safeguard request by Colombia’s cattle breeders purely political with no legal or factual basis.
“The milk powder import safeguards petition is a political action pursued in the months leading up to a presidential campaign at the expense of Colombia’s poorest and import-dependent small and medium-sized industries; it has no economic or commercial merit,” Castaneda said in his testimony. “By imposing a political safeguard, the Colombian government would create a serious conflict between Colombia and the United States, impacting Colombian exports of other products to the U.S.”
Castaneda encouraged the U.S. and Columbia to work together to expand overall milk consumption, benefiting farmers in both nations.
NMPF Works to Resolve EU Certification Barrier
As a result of significant advocacy and technical engagement by NMPF in collaboration with USDEC August yielded two major milestones in NMPF’s year-long work with the U.S. government to preserve workable access opportunities for U.S. dairy exports requiring EU certification.
NMPF met Aug. 3 with a broad U.S. interagency team regarding the U.S. government’s plan on implementing the new EU certificates. That meeting provided critical clarifications on the extent of the new requirements and – most importantly – reassurances that the process would not impose new burdens on U.S. dairy farmers and processors. USDA on Aug. 13 then published a summary of that information, outlining that the new EU certification process would simply entail verification that the milk used was either regulated as Grade “A” or under AMS’s milk for manufacturing program.
That announcement resolved the crux of the concern – whether the U.S. would be able to implement the new EU certificates in a non-burdensome manner. The hard-won victory followed months of painstaking discussions between U.S. and EU officials regarding the strength of the U.S. dairy system and the upheaval that would unfold from either upending trade or imposing onerous new requirements on U.S. dairy This recognition that the U.S. dairy regulatory reliably produces safe products that meet the underlying goals of EU regulations even though implementation differs is precisely what NMPF had hoped to see achieved with the EU and had advocated for throughout the past year.
That breakthrough on core issues was complemented by an Aug. 12 announcement that would delay implementation of the new requirements from Aug. 21 to Jan. 15. Throughout 2021, NMPF advocated strongly both for a workable resolution to the new EU requirements and for more time to implement them.
The extension will enable USDA to ensure that the AMS Dairy Program will have its new electronic Agriculture Trade Licensing and Attestation Solution (ATLAS) system ready to be used by U.S. dairy exporters to complete the EU’s new certificates by the time they are required on Jan. 15. NMPF continues to work with the U.S. government to help ensure for a smooth transition and will closely continue to monitor implementation of the new certification program to make sure it works as advertised.
Congress and Maritime Commission Take First Steps on Ports
NMPF welcomed bipartisan legislation introduced by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) on Aug. 10 to address unfair practices and charges implemented by ocean carriers. The legislation, entitled The Ocean Shipping Reform Act of 2021 (H.R. 4996), was the result of a strong push from NMPF, the U.S. Dairy Export Council (USDEC), and a coalition of agricultural exporters.
The bill would increase the Federal Maritime Commission’s authority to oversee and regulate ocean carrier activities, expand the agency’ enforcement options and penalties against violations, increase transparency and accountability of the commission and ocean carriers, and provide new opportunities for exporters to seek redress from ocean carriers for violations.
NMPF, with cooperation from the U.S. Dairy Export Council (USDEC), worked closely with congressional offices as the legislation was drafted, providing detailed examples and economic impact analysis with critical input from NMPF and USDEC members. The legislation represents an important step forward, but much work remains to be done to see it passed by congress.
The House also increased enforcement funding by $525,000 in late July for the maritime commission in the Department of Transportation’s appropriations bill and directed the agency to enhance assistance to U.S. exporters and importers without hiring lawyers.
Supplementing this congressional action, the maritime commission finally responded to persistent calls from NMPF and other agricultural organizations for more proactive enforcement measures by launching an audit of ocean carriers’ billing practices on July 20. The commission on Aug. 4 asked eight ocean carriers to justify port congestion surcharges as part of its investigation into unreasonable detention and demurrage charges.
NMPF will continue to proactively advocate with the administration and Congress to pursue additional solutions to support and complement the congressional action, including an effort to drive a more comprehensive near-term response from the administration to the shipping crisis.
Dairy Industry Commends Introduction of Ocean Shipping Reform Act
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) offered their support for bipartisan legislation introduced today by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), the Ocean Shipping Reform Act.
The dairy industry, as well as other exporters, has faced substantially increased costs to ship their goods overseas, challenges obtaining containers and other equipment to deliver their goods to ports and beyond, and often incur booking cancellations or delays for vessel space. Owing in part to the Covid-19 change in American online orders, imports have affected vessel operations and container availability, diminishing export options for American dairy products. Ocean carriers have exacerbated this situation with high detention and demurrage charges, the increased shipment of empty containers back to Asia, and other unfair practices.
The Garamendi-Johnson legislation is the result of a concerted effort by NMPF and USDEC, along with other agriculture producers and exporters, to highlight the challenges U.S. exporters face with port congestion and the unfair practices and charges implemented by ocean carriers. NMPF and USDEC are urging Congress and the executive branch to take swift action to address these critical problems.
The Ocean Shipping Reform Act would provide new authority to the Federal Maritime Commission (FMC) to address unjust and unreasonable practices by ocean carriers. It would institute new penalties against ocean carriers and marine terminal operators for violations of the Shipping Act, require expanded public disclosure from the FMC and carriers, and establish a series of new regulations against unfair carrier practices.
The bill also offers new oversight of carriers’ charges and fees and will permit the FMC to dedicate collected penalties as restitution to impacted exporters. NMPF and USDEC appreciated the opportunity to work closely with both Congressional offices as the legislation was drafted and are pleased to endorse the bill.
“We are grateful for the bipartisan leadership from Congressmen Garamendi and Johnson in developing and introducing the Ocean Shipping Reform Act,” said Krysta Harden, president and CEO of USDEC. “Dairy producers and manufacturers have faced unreasonable costs and unfair practices from ocean carriers that negatively affect U.S. exports, increasing costs and putting at risk established trading relationships. This legislation will hopefully curtail those abuses and encourage better export-oriented behavior moving forward.”
“Dairy exporters have faced unfair detention and demurrage charges, unreliable and unfair booking practices and cancellations, and unwarranted challenges trying to obtain containers and other equipment,” said Jim Mulhern, president and CEO of NMPF. “While some of these challenges are due to Covid-19 changes in retail purchases, carriers have abused the situation to their advantage. Our members need the U.S. government to act, and we welcome the introduction of this legislation as an important, positive step.”
The economic effects from these challenges are significant – the average cost of transporting a container is estimated to have increased by approximately 200% over the past year, while the estimated impacts to dairy producers from just January to May 2021 include over $200 million in added shipping and related costs, approximately 10 percent of the export value during the same period.
This legislation represents an important step toward implementing both short and long-term solutions, yet NMPF and USDEC continue to urge the importance of additional measures as well to address the challenges plaguing U.S. food and agricultural exporters expeditiously and fully. The organizations urged Congress to swiftly approve the Ocean Shipping Reform Act while at the same time championing the need for additional administrative solutions that could be implemented more immediately to address the ongoing shipping crisis.
